Weight-loss drug Wegovy helps grow Danish GDP 

Growth in second quarter in particular driven by an 'exceptionally strong Danish pharmaceutical sector', analyst says

Wegovy weight-loss drug: Novo’s meteoric rise has pushed its market value above Denmark’s GDP.

Denmark’s economy expanded for the third consecutive quarter as Novo Nordisk, the maker of Wegovy weight-loss drug, and other Danish drug firms tap massive demand.

Gross domestic product grew 0.2% in the second quarter from the previous three months, as Denmark has outperformed most of its rich continental peers since the pandemic. 

However, the contribution of pharmaceutical companies to Danish output has triggered worries it may be concealing weaknesses elsewhere in the economy. 

The growth in the second quarter is in particular driven by an “exceptionally strong Danish pharmaceutical sector”, Palle Sorensen, chief economist at Nykredit, said in a research note to clients. 

“Production in the pharmaceutical sector has been so massive that it has pulled the entire economy up. Without it, the picture would probably have been completely different."

Second-quarter GDP would have contracted without the Danish pharmaceutical industry, whose performance is driven especially by Novo’s success, said Las Olsen, chief economist at Danske Bank. 

“There is no doubt that many companies in other industries are feeling more headwinds,” he said, highlighting other industrial firms and the construction sector, where “there are clear signs of a turn for the worse”.

Calculations by Sydbank show the Danish economy would have stagnated since the end of 2021 had it not been for the pharmaceutical industry. 

Novo’s meteoric rise has pushed its market value above Denmark’s GDP. The drug maker last week raised its profit and sales outlook for 2023 as demand for its new weight-loss drug Wegovy and another diabetes medicine fuel revenue growth.

Industrial production in Denmark increased by 4.2% on the quarter in the same period, but would have shrunk by 4% if measured without the pharmaceutical industry, Statistics Denmark said earlier this month.

The IMF in June raised its forecast for Danish GDP, expecting the economy to grow 1.3% in 2023, from a previous estimate of 0.5%. 

• Bloomberg